January passenger vehicle sales rise 15.3%

Sales of passenger vehicles in China rose 15.3% year-on-year in January, state media reported. The growth came despite the removal of tax breaks and subsidies previously applied to purchases of small cars, and the introduction of a quota system for purchases in Beijing. The luxury car market in particular exhibited robust growth over the month, with BMW (BMW.FWB) and Mercedes-Benz (a division of Daimler, DAI.FWB) reporting year-on-year sales growth of 70.4% and 89%, respectively. The China Passenger Car Association, however, warned that sales growth was expected to slow significantly this year. The expiration of the preferential sales policies would likely put an end to what it termed the "excessive consumption" of the last two years. Any growth would likely be found in the rapidly growing markets in second- and third-tier cities, it said.